Yes, there was indeed an explosion near Grand Central Terminal. No, it was not at Grand Central. Yes, there's a lot of smoke. A transformer exploded on East 41st Street between Third and Lexington Avenues; it caused a four-alarm fire and injured one person. Police have closed that block and evacuated some buildings. The subways are running, including the Lex lines, though they're currently skipping Grand Central, which must be a real pain for those who were trying to catch the 6:45 to Larchmont. We're about to call it a day, but we have no doubt Sewell Chan will keep you abreast of the latest news all night long.
Buildings Evacuated After Midtown Explosion [City Room/NYT]
Update: The source of the explosion was a steam pipe, and as of 8:15 p.m. there is no service on the 4, 5, and 6 subway lines between 125th Street and Bowling Green, service on the 42nd Street shuttle has been suspended, and 7 trains bypass Grand Central.
MTA Service Alert [MTA.info]